The Unidade Real de Valor (URV; ), was a unit of account (a non-monetary reference currency) used in Brazil. It was created in March 1994, as part of the Plano Real. URV was based on the "Larida Plan", published in 1984 by Pérsio Arida and .
Its main purpose was to establish a parallel currency to the cruzeiro real, free from the effects of inertial inflation on the latter, which exceeded 1,200% per year prior to the implementation of the new currency, the real.
It was conceived as a temporary instrument to break up the "psychological inertia" that had ingrained in the Brazilian mindset and which caused prices to keep rising as a consequence of subjective estimation of inflation or preemptive adjustment without cost assessment. These phenomena are among the chief characteristics of hyperinflation, resulting from the erosion of confidence on the legal tender. The idea was to let the old currency (the cruzeiro real) fully absorb the effects of hyperinflation while having a new currency to be stable (in nominal terms) by adjusting its exchange rate against the old one.
URVs were quoted in cruzeiros reais and its intrinsic value was pegged to three price indices and had a fixed parity of 1-to-1 to the daily U.S. dollar exchange rate. The exchange rate of URVs to cruzeiros reais was recalculated and published daily by the government.
Prices were quoted both in URVs and cruzeiros reais, but payments had to be made exclusively in cruzeiros reais, since the URV would not become legal tender until July 1, 1994. For instance, banks were required to report balances on accounts in both currencies and contracts had to be rewritten to express prices in URVs.
When the URV (Unit of Real Value) was implemented in March 1994, a retroactive table was also created for salary adjustments based on the URV, dating back to 1993. This value then became the final salary value after the implementation of the new currency. Furthermore, bank slips began to be denominated in URV in June 1994, and post-dated checks dated July 1994 in Cruzeiros Reais were exchanged according to the final conversion value.
The URV was extinguished on July 1, 1994, when it was converted to a new currency, the real, at parity (i.e., 1 real = 1 URV = CR$2,750), effectively breaking the hyperinflationary cycle, bringing stability to the Brazilian currency.
The implementation of the new currency was one of the greatest currency changes in known history, with almost the entirety of the country's legal tender replaced in about 45 days.
Daily value of the URV per week (cruzeiros reais) 1st week Mon Tue Wed Thu Fri 2nd week Mon Tue Wed Thu Fri DateValue28 Feb –1 Mar647.502 Mar657.503 Mar667.654 Mar677.98 DateValue7 Mar688.478 Mar699.139 Mar709.9610 Mar720.9711 Mar732.18 3rd week Mon Tue Wed Thu Fri 4th week Mon Tue Wed Thu Fri DateValue14 Mar743.7615 Mar755.5216 Mar767.4717 Mar779.6118 Mar792.15 DateValue21 Mar805.5322 Mar819.8023 Mar834.3224 Mar849.1025 Mar864.14 5th week Mon Tue Wed Thu Fri 6th week Mon Tue Wed Thu Fri DateValue28 Mar879.4529 Mar895.0330 Mar913.5031 Mar931.051 Apr931.05 DateValue4 Apr931.055 Apr948.936 Apr967.167 Apr985.748 Apr1,004.68 7th week Mon Tue Wed Thu Fri 8th week Mon Tue Wed Thu Fri DateValue11 Apr1,023.9812 Apr1,043.6513 Apr1,063.7014 Apr1,084.1315 Apr1,104.96 DateValue18 Apr1,126.1819 Apr1,147.8120 Apr1,169.8021 Apr1,191.9322 Apr1,191.93 9th week Mon Tue Wed Thu Fri 10th week Mon Tue Wed Thu Fri DateValue25 Apr1,313.9726 Apr1,235.9927 Apr1,258.1228 Apr1,280.1929 Apr1,302.65 DateValue2 May1,323.923 May1,345.544 May1,367.565 May1,389.946 May1,412.74 11th week Mon Tue Wed Thu Fri 12th week Mon Tue Wed Thu Fri DateValue9 May1,435.9210 May1,459.7611 May1,484.2712 May1,509.2013 May1,534.66 DateValue16 May1,560.5517 May1,586.8718 May1,613.6419 May1,640.8620 May1,668.54 13th week Mon Tue Wed Thu Fri 14th week Mon Tue Wed Thu Fri DateValue23 May1,696.6924 May1,725.3125 May1,754.4126 May1,784.0027 May1,814.09 DateValue30 May1,844.6931 May1,875.821 Jun1,908.682 Jun1,942.113 Jun1,942.11 15th week Mon Tue Wed Thu Fri 16th week Mon Tue Wed Thu Fri DateValue6 Jun1,976.137 Jun2,010.748 Jun2,046.389 Jun2,082.6510 Jun2,119.80 DateValue13 Jun2,157.7814 Jun2,196.5515 Jun2,236.0216 Jun2,276.9117 Jun2,318.55 17th week Mon Tue Wed Thu Fri 18th week Mon Tue Wed Thu Fri DateValue20 Jun2,361.4921 Jun2,406.0522 Jun2,452.1723 Jun2,499.1824 Jun2,547.09 DateValue27 Jun2,596.5828 Jun2,647.0329 Jun2,698.4630 Jun2,750.001 JulR$1.00Monday values were retroactive to Saturdays and Sundays. Subsequently, a formula was established for retroactive accounting for the previous months and years.Source: Banco CentralBanco Central do Brasil. Disponível em BCB
See also Constant Purchasing Power Accounting Inflation accounting International Financial Reporting Standards Indexed unit of account
References
External links How Fake Money Saved Brazil